Posted by : Matthew Wild | On : June 20, 2013

In American Express v. Italian Colors (Amex), the Supreme Court held today that “a contractual waiver of class arbitration is enforceable under the Federal Arbitration Act when the plaintiff ’s cost of individually arbitrating a federal statutory claim exceeds the potential recovery.”  The problem is that the decision leaves the plaintiff with no way to vindicates its rights.  The plaintiff’s maximum recovery would have been $38,000, but to proceed on its own would require an expert report from an economist that would cost between $100,000 and $1,000,000.  The contract’s confidentiality provisions prevent the plaintiff from sharing this expense with other victims.  Thus, the clause effectively precludes any method to vindicate the Sherman Act (not just class actions).  The dissent summed the import of the decision as “[t]oo darn bad.”  It really is.

Author: Matthew S. Wild, Wild Law Group PLLC



Posted by : Matthew Wild | On : January 5, 2011

On December 21, 2010, the United States District Court for the Northern District of California in Pecover v. Electronic Arts, Inc., No. 08-cv-02820-VRW, Dkt. #198 (N.D. Cal. Dec. 21, 2010), certified a nationwide class of consumers, who purchased Madden NFL, NCAA or Arena Football since January 1, 2005.  The suit alleges that that EA’s exclusive license agreements violated the Cartwright Act.  The case is important for two distinct reasons.  First, the Court held that California law applied to all claims regardless of where the consumers purchased the products because of EA’s nexus to California.  This is a tremendous development because it allows for a nationwide class based on a single state law and therefore eliminates conflict between different state laws, which is often a barrier to certification of nationwide class actions.  Second, the Court held that the consumers provided a model that would show that they suffered common impact and therefore satisfied the predominance requirement for class certification — which can be a difficult element to satisfy.  The decision appears here.  ea class cert



Posted by : Matthew Wild | On : March 31, 2010

The Supreme Court held today that district courts must follow Fed.R.Civ. 23 in class actions alleging violations of state law even though the state statute prohibits prosecution of the claim as a class action.  In Shady Grove Orthopedic Assoc. v. Allstate Insurance Co., No. 08-1008, 2010 WL 1222272 (Mar. 31, 2010), the Court held that Rule 23 trumps NY CPLR 901(b), which prohibits class actions under New York statutes authorizing a claim for statutory or multiple damages.  That statute has barred claims under New York’s antitrust statute (the Donnelly Act) as well its Deceptive Trade Practices Act.  Numerous state consumer protection statutes likewise have prohibitions on class actions.  Shady Grove breathes life into class actions in federal court under those statutes.



Posted by : Matthew Wild | On : December 9, 2009

On November 25, 2009, the court in In re Static Random Access Memory Antitrust Litig., No. C 07-01819 CW, 2009 WL 4263524 (N.D. Cal. Nov. 25, 2009), certified 28 indirect purchaser classes – one nationwide class for injunctive relief under section 16 of the Clayton Act and 27 separate indirect purchaser damages classes under the laws of Arizona, Arkansas, California, Florida, Hawaii, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Montana, Nevada, New Mexico, New York, North Carolina, North Dakota, Pennsylvania, Rhode Island, South Dakota, Tennessee, Utah, Washington, West Virginia, Wisconsin, Puerto Rico and the District of Columbia.
Injunction: the court certified the class under Rule 23(b)(2). It rejected the standing challenge holding “Plaintiffs have alleged sufficient facts to establish Article III standing for their nation-wide injunctive relief class. IP Plaintiffs allege that Defendants and their co-conspirators entered into a continuing conspiracy in restraint of trade artificially to raise prices for SRAM in the United States. They further allege that these market-wide overcharges were then passed through the chains of distribution, and that they were injured by paying supra-competitive prices when they indirectly purchased Defendants’ products.” The court also rejected defendants’ argument “because IP Plaintiffs seek to certify a nation-wide injunctive class from November 1, 1996 through December 31, 2006, they have impliedly alleged that the conspiracy ended in 2006. However, a finite proposed class period does not defeat certification of a class under Rule 23(b)(2). See, e.g., Jaffe v. Morgan Stanley & Co., 2008 WL 346417, at *3 (N.D.Cal.) (certifying injunctive-relief class for settlement affecting persons employed by the defendants “at any time between October 12, 2002 and December 3, 2007). Further, IP Plaintiffs allege that the same market conditions that facilitated the conspiracy from 1996 to 2006 continue today. They allege that Defendants’ price-fixing resulted from a systematic, repeated pattern of sharing sensitive competitive information which was greatly facilitated by the cross-competitor business relationships that still exist. Thus, there is alleged a significant risk that the conspiracy will persist or reform in the future.”
Individual state damages classes: the court certified 27 different classes based on individual state law. The court rejected “Defendants[’] … concern[] that [it] will be unable to manage state-law claims from twenty-seven state classes” holding “there is no qualitative difference between a federal district court considering class certification of state claims under that state law and a federal court serving as a multi-district litigation forum performing the same task for many federal courts. Moreover, courts frequently certify classes under the laws of multiple jurisdictions. See, e.g., Norvir Anti-Trust Litig., 2007 WL 1689899, at *8 (N.D.Cal.) (certifying class under the common law of forty-eight states); In re Pharm. Indus. Average Wholesale Price Litig., 233 F.R.D. 229, 230-31 (D.Mass.2006) (certifying multi-state defendant subclasses under the consumer protection laws of forty-one states).” In holding that the individual issues predominated over the individual issues, the court held that “there [wa]s a reasonable method for determining on a class-wide basis whether and to what extent that overcharge was passed on to each of the IP Plaintiffs at all levels of the distribution chain.”
Experts: the court rejected each parties’ challenge to the other parties’ expert holding that the appropriate standard is “whether the expert evidence is sufficiently probative to be useful in evaluating whether class certification requirements have been met.” The court made short shrift of the challenges holding “Although each side presents myriad valid challenges to the other’s expert, the Court concludes that these challenges are of the type that go to the weight of the evidence, not the admissibility. … The parties’ motions to exclude reflect disagreement with the opposing parties’ position; however, this disagreement does not warrant exclusion.”



Posted by : Matthew Wild | On : May 20, 2008

On May 2, 2008, the Eastern District of Pennsylvania granted class certification in In re Wellbutrin SR Direct Purchaser Antitrust Litig., No. 04-5525, 2008 WL 1946858 (E.D. Penn. May 2, 2008). Plaintiffs claim that GlaxoSmithKline unlawfully extended its monopoly over Wellbutrin SR through fraud on the patent office and sham litigation against potential generic entrants. Defendant argued that a conflict exists among class members because national wholesalers benefit from the lack of generic competition — generic manufacturers often bypass wholesalers. The court rejected this argument because as generic Wellbutrin SR has been available since 2004, no theoretical conflict could still exist. Plaintiffs met the other requirements for class certification. Notably, plaintiffs offered a “colorable method” to prove common impact. Plaintiffs’ expert plans to examine the impact of generic entry on brand name pharmaceuticals through an analysis of public data collected on the dispensation and purchases of prescription drugs. In this case, class certification was straightforward. It can become more difficult when, for example, prices are negotiated on an individual basis. See, e.g., Blades v. Monsanto Co., 400 F.3d 562, 569 (8th Cir. 2005) (denying class certification because, inter alia, “the market for seeds is highly individualized, requiring particularized evidence to determine the competitive price that would have prevailed”).



Posted by : Matthew Wild | On : May 16, 2008

In In re Scrap Metal Antitrust Litig., No. 06-4511, 2008 WL 2050820 (6th Cir. May 15, 2008), the Sixth Circuit affirmed the $20 million jury verdict.  The Sixth Circuit rejected defendants’ Daubert challenge premised on the claim that plaintiffs’ expert relied on unreliable data.  The court characterized this type of attack as one directed to the results and not the methodology and therefore should not be excluded under Daubert.  Rather, “vigorous” cross-examination should be sufficient to reveal to the jury these flaws.  Notably, the defendants’ expert conceded that even use of the flawed data should not affect the results because those data moved in parallel to the defense expert’s data.  This decision illustrates the importance of showing in a  Daubert challenge that any flaws were actually material to the result.  “Pitfalls to Avoid in Proving Price-Fixing Damages,” Antitrust Litigator (Spring 2006) — linked in the Articles page above — examines strategies to pursue in Daubert challenges.  The Sixth Circuit also affirmed class certification holding that the predominance requirement was satisfied because there was a class-wide method to prove damages



Posted by : Matthew Wild | On : April 3, 2008

On March 28, 2008, the United States Court of Appeals for the First Circuit reversed the grant of class certification in In re New Motor Vehicles Canadian Export Antitrust Litigation, Nos. 07-2257, 07-2258, 07-2259, 2008 WL (1st Cir. Mar. 28, 2008). In that case, plaintiffs alleged a conspiracy among car manufacturers — a violation of Section 1 of the Sherman Act — to discourage U.S. customers from purchasing cars in Canada — which were cheaper at the time due to favorable exchange rates — for their use in the U.S. The manufacturers allegedly used a variety of mechanisms to discourage this customer practice such as refusing to honor warranties on Canadian cars. The United States District Court for the District of Maine certified two classes — (1) injunctive relief class under Section 16 of the Clayton Act and (2) damages class under various state antitrust and consumer protection laws. Defendants argued that plaintiffs’ claim for injunctive relief was moot because there is no longer a “realistic threat” of future harm. As a result of the weak dollar, there is no longer a realistic threat that manufacturers will conspire to keep consumers from importing cars from Canada. The Third Circuit agreed and reversed class certification on the injunctive relief claim with instructions to dismiss that claim. The Third Circuit also agreed with the District Court’s treatment of the damages class — that plaintiffs should have more time to develop their theories to support class certification. The Third Circuit, nevertheless, vacated the preliminary grant of class certification because it was concerned that subject matter jurisdiction no longer existed. With the federal claim now dismissed, there would have to be an independent basis for federal subject matter jurisdiction over the damages claims under state law. The District Court was instructed to determine if jurisdiction existed.